A and B are partners their respective capitals are Rs.50,000 and Rs.30,000. Interest on capital is agreed @ 6% p.a. B is allowed an annual salary of ₹2500. Profit during the year prior to calculation of Interest on capital but after charging B's salary is ₹12,500. The manager is paid a commission of 5% of the net profit before charging B's salary and the commission. The amount of commission paid to manager is:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹750
B’s salary is an appropriation of profit, so it is added back to find the net profit on which the manager’s commission is based.
Net profit before B’s salary and commission = ₹12,500 + ₹2,500 = ₹15,000
Manager’s commission = ₹15,000 × 5/100 = ₹750
Check with the book’s answer: ₹12,500 − ₹750 − interest on capital ₹4,800 = ₹6,950, shared 3 : 2 = ₹4,170 and ₹2,780.
NCERT (2026-27 edition):
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